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Innovation

Microsoft in satellite ISP deal

The new service will allow consumers to access the Internet via a two-way satellite hookup.
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Written by Margaret Kane, Contributor on

Microsoft Corp. has teamed up with an Israeli company to develop a satellite-based Internet service for consumers.

Microsoft (Nasdaq: MSFT) will invest $50 million in Gilat Satellite Networks Ltd.’s (Nasdaq: GILTF) new company, Gilat-to-Home, and will own 26 percent of the joint venture.

The new company will be based in McLean, Va., and will be run by Zur Feldman, who formerly served as executive vice president of operations at Packard Bell Electronics Inc.

The new service, which is currently in trials, will allow consumers to access the Internet via a two-way satellite hookup. The service is typically around 10 times faster than traditional modems.

MSN Internet access via satellite will be available directly from Microsoft and through retailers. It will launch first at Tandy Corp.'s Radio Shack stores, in the Microsoft "store-within-a-store," later this year.

In a separate release, Gilat said it expected the service to grow to a base of 2.7 million subscribers by 2005.

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